The worst thing from our perspective would be to have a student who’s a senior, who may have upwards of $60,000 in loans, not be able to graduate.Indeed. Students don't get partial credit for completing half of a college degree. It's all or nothing, and it's much more difficult to find a job that will allow you to repay tens of thousands of dollars in student loans if you don't have a diploma in hand. But you don't hear much about the relationship between student loan defaults and the United States' low college graduation rates - less than two-thirds of students overall graduate in six-years, and less than half of minority students graduate on time. The ten-year default rate for students with high debt loads who received a four year college degree is 20 percent. For students who don't get a degree, that number is certainly much higher.
Spelman provides a great example to other colleges interested in raising graduation rates and reducing student loan defaults. And colleges can start by reallocating some of the financial aid that is currently going to recruit wealthy students and use it to ensure that students don't just have access to a four-year degree, but actually attain it.
Over at Higher Ed Watch, Stephen Burd writes another good post on why we shouldn't be bailing out student loan companies, and says "These defaults are not just numbers on a balance sheet, they're students." So true.
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